2. Read the text again and say if the following sentences True or False:

1. Economics is the study of how people produce and consume goods and how these goods are produced and obtained.

2. There exist several main types of economics.

3. Economists can’t answer important questions about how people, industries, and countries can maximize their productivity, create wealth, and maintain financial stability.

4. The first modern economic theory appeared in the seventeenth century.

5. Classical theory forms the basis of capitalism and is forgotten today.

What is economics?

Economics is the study of the production and consumption of goods and the transfer of wealth to produce and obtain those goods. Economics explains how people interact within markets to get what they want or accomplish certain goals.

There are two main types of economics: macroeconomics and microeconomics. Microeconomics focuses on the actions of individuals and industries, like the dynamics between buyers and sellers, borrowers and lenders. Macroeconomics, on the other hand, takes a much broader view by analyzing the economic activity of an entire country or the international marketplace.

A study of economics can describe all aspects of a country’s economy, such as how a country uses its resources, how much time laborers devote to work and leisure, the outcome of investing in industries or financial products, the effect of taxes on a population, and why businesses succeed or fail.

Economists try to answer important questions about how people, industries, and countries can maximize their productivity, create wealth, and maintain financial stability.

Adam Smith, known as the Father of Economics, established the first modern economic theory, called the Classical School, in 1776. Smith believed that people who acted in their own self-interest produced goods and wealth that benefited all of society. He believed that governments should not restrict or interfere in markets because they could regulate themselves and, thereby, produce wealth at maximum efficiency. Classical theory forms the basis of capitalism and is still prominent today.

As one can see, economics shapes the world. Through economics, people and countries become wealthy. Because buying and selling are activities vital to survival and success, studying economics can help one understand human thought and behavior.

Adapted from http://www.whatiseconomics.org/

Useful words and expression

transfer переход

toobtainполучать

withinв пределах чего-либо

to accomplish goals достигать цели

to take a much broader view

принять более широкий взгляд

entireвесь, целый

todevoteпосвящать

leisureсвободное время, досуг

outcome выход

population население

to succeed преуспевать

successуспех

tofailне удаваться

tomaintainподдерживать

toestablishустанавливать

modernсовременный

benefitвыгода, польза

societyобщество

governmentправительство

torestrictограничивать

tointerfereвмешиваться

toregulateрегулировать

therebyтем самым

efficiencyэффективность

prominentвыдающийся

toshapeформировать

vitalжизненно важный

survivalвыживание

humanчеловеческий

thought мысль

behavior поведение

Grammar: Present Simple, Past Simple (Regular verbs)

Present Simple	Examples Economics explains how people interact within markets. This theory does not explain why people do not interact with each other. What does microeconomics explain? Why do people interact?
Past Simple	Examples Adam Smith established the first modern economic theory. Adam Smith did not establish all modern economic theories. What did Adam Smith establish?

1. a) Find all examples of Present Simple and Past Simple in the text.

b) What is Present and Past Simple of the verb “to be”?